Yesterday, we reported on the security flaw in Windows 7's UAC slider dialog, and today, Microsoft has given a response to the situation, but it doesn't seem like the company intends to fix it. "This is not a vulnerability. The intent of the default configuration of UAC is that users don't get prompted when making changes to Windows settings. This includes changing the UAC prompting level." I hope this reply came from a marketing drone, because if they intend on keeping this behaviour as-is in Windows 7 RTM, they're going to face a serious shitstorm - and rightfully so. Let's hope the Sinfoskies and Larson-Greens at Microsoft rectify this situation as soon as possible.

Just one little problem with what you're saying. A script can change these settings... without a prompt. Now, how can a script be run? Well, let's see here... given how many people seem to illegally download commercial software on the Windows platform, one could simply embed this script in their installer. If the default settings aren't changed, it will run, no problem. And then everything is open.
So the defaults can be changed. How many average home users do you know who have any idea what UAC actually is, or how to change it? Even if they were told how, how many of them know or care why?
Yes, you're going to have complainers about UAC regardless of the decisions MS makes. This, however, is a legitimate complaint as it does not require physical interaction to disable UAC. This is a situation where the default security level is insufficient to prevent a script from making changes to the security policy. This is a huge no-no. The fix? Exempt UAC changes from being scripted, forcing a prompt whenever the UAC setting is changed. Leave the other prompts as they are, but always prompt when changing any UAC-related settings. This isn't too difficult, wouldn't interfere with the average home user, and those who did want to change the UAC settings would know why they were changing them anyway. Clicking one extra continue button in this one instance wouldn't hurt them.
Microsoft had better fix this, seriously. If they don't, they might as well drop security altogether, as they're leaving the front door wide open anyway.

And how does that installer run? After it's authorized by the user with UAC.

Voila.

This is the equivalent of saying "I can turn off your house alarm from inside your house". Well, obviously. Just how are you going to get inside the house? You're going to trip the alarm somehow in the process of trying to break in.

That's the simplest terms I can put it in, I hope you can understand.

Look, I think you don't understand the purpose of UAC. The purpose of UAC is to allow Least User Access to the machine. To allow you to perform everyday computer tasks, without being an everyday administrator. It just so happens that a lot of malware tries to perform administrative actions.

UAC is not a safety net to be used without antimalware / antiviruses, it is just a privilege elevator. People make UAC out to be more than it really is.

It is working as intended, because for the program to be able to execute, one way or the other, you need to elevate your privileges with UAC.

If the user downloads a malicious installer, he's already been social engineered into running a malicious program, and into consenting with UAC that this program is safe to run.

This is the circular logic I don't get, how can something which under every circumstance is stopped from executing, be a headline catching critical system flaw? It's ridiculous and it's sad that such FUD is spread on this site.

I understand what you say, but are you sure there are no ways to prompt the execution of a VBScript by way of malware installation without prompting the OS that it's trying to run an unsigned executable?

If anything, the amount of naked_chick.jpg.vbs exploits are surely going to rise.

Either way, even if it doesn't prompt a full-blown vulnerability by itself, it gives way for a lot of exploits, and always having social engineering on your mind, you can do a lot of things, even trick people into installing things that do not have a "CLICK HERE.exe" installer, but a "CLICK HERE.vbs" installer, which can happily disable UAC and then run all the unsigned binaries it wants. I've seen my dad install all kinds of crap on his system this way, regardless of .exe extension.